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Changes in average wage are usually attributed to technological change in the past industrial revolutions. With the emergence and gradual explosion of artificial intelligence (AI) in the 4th industrial revolution, this paper applies panel vector autoregressive technique, with annual data from the World Bank and global economy from 2004 to 2017, to examine the effect of artificial intelligence on average wages in Southern Africa. Findings from the study show that artificial intelligence has a significant negative relationship with average wages but is positively associated with gross domestic product per capita (GDPC), unemployment and inflation. The study also finds inflation and GDPC to be positively associated with average wage. Based on the finding, policy direction focusing on wage stabilisation, redistribution of income, advance learning and skill development training that promote competitiveness to computerisation is recommended. [ABSTRACT FROM AUTHOR]

The increasing level of automation in the fourth industrial revolution has received a global interest in research and political landscape in recent years. While some research advances have been made in the developed world with regard to its implications for unemployment, next to no study has so far sought to establish if there is any statistical relationship between automation and unemployment in developing countries where unemployment is very high. The purpose of this study is to examine the effect of automation on unemployment in Southern Africa. Findings from the study show that automation has a significant positive relationship with unemployment rate. The study also finds foreign direct investment and business cycle (higher production output change) to be negatively associated with unemployment. Based on these findings, it is recommended that proper investment in learning and skill development training aimed at making individuals more competitive with regard to automation be pursued to increase the prospect of employment. [ABSTRACT FROM AUTHOR]